And you thought only ghosts could make horror stories

Personal Finance

If you thought only ghosts could make horror stories let me tell you horror stories with humans as protagonists. It is only natural that we feel so safe and secured in our lives that we assume nothing could possibly happen to us. It is good to maintain an optimistic outlook but at the same time we must prepare ourselves for uncertainties for the simple reason that they are uncertain.

It would be extremely ironic if someone selling life insurance to people did not have a life insurance himself. Well that is what happened to someone I knew personally. The man not only sold life insurance for a leading corporation but he held a senior position too in that corporation and earned big bucks. But his savings was virtually nothing. Neither did he have any life cover for himself or family nor a health/ Medical Insurance. He did not save for his child’s education; his car was on loan and lived in a rented house. He died at a pretty young age leaving his family clueless. When the wife approached the banker and paid off the entire due of the car she was completely surprised that there was a credit card due too. And unless the credit card due is paid the NOC of the car will not be released. She had to pay that too.

Another such incident I came across recently was that of a young married couple who lived in our complex at Kolkata. The husband worked in a senior position with a leading Consumer durables company and had various bank accounts across cities he worked in. But the worst part was that the wife did not have access to any of the bank pass books or his investments. The flat they lived in was on EMI and the husband did not have any Life Insurance policy or protection for the Home Loan EMI. One fine day, while on tour he died of heart attack leaving the family clueless. When family started accumulating all his investment and savings they found to their amazement that address in most of the bank accounts were not changed to the current address, in some there was no nomination, the accounts opened prior to his marriage had his mother as nominee who is now no more. He only had a small Insurance cover provided by his company. The husband never shared his financial position with his wife and his wife being a home- maker did not have any idea that one day she would have to take a plunge to protect her children and earn her livelihood the hard way. The family had to sell the flat to square off the EMI and currently staying in a rented accommodation, the wife has joined a private school and somehow managing a square meal and the child’s education. You will be surprised to know they once lived in an air conditioned flat in the city’s best address and drove a Honda City!

Yet another incident I came across is about a techie who died recently in a car accident in Bangalore. He used to maintain all his investment records very neatly in password protected word/ excel files in his laptop and sometime verbally discussed his investments with his working chartered accountant wife. During accident the car got damaged badly along with the laptop and other things kept on the back seat. The family never dreamt of this calamity and therefore even his chartered accountant wife did not have any clue where to start from as far as recovering his investments were concerned? Even though she knew he has sizeable investments she did neither have any copy nor the “password” of the password protected files? The situation was indeed ironic since the wife was a finance expert and yet there was little she could do to help herself.

Friends, during my long career as a Financial Advisor I have come across many such incidents. The point is when we are alive we are so casual towards our lives that we do not care what could happen to the family once we are not there? What will happen to children if suddenly something goes wrong with the parents? We all are earning, having a good time and only look at the good part of our lives! But those who face above get completely shaken up and find themselves at the mercy of the God.

How it can be overcome? How to know and recover the investments in such situations? I will throw some light on how to recover the investments made by the deceased and how to claim them after his/her death. Assuming the deceased had some investments in Mutual funds, few Insurance policies, some fixed deposits in a bank, a locker in a bank, a Share Trading Account or Shares in paper form (non-demat), a provident fund account (if he was employed) or maybe a Public provident fund account apart from a couple of regular bank accounts. And, you do not have any clues except some papers like, bank statements, demat account holding or policy bonds or some shares in physical mode found after the death.

1. The first thing you should do is to check his entire bank accounts / or request the banker for his historical bank statements. Here, you will get the details of all cheques issued and thus, you will come to know about the investments, because cash transactions are not allowed for investments in mutual funds and shares, and only some companies accept cash for buying Insurance policies. Also, the PAN number is mandatory for buying shares. Once you know whom the cheques have been issued to, you can directly contact the companies one-by-one or else do the following:-

2. Retain mobile number of the deceased – This is the most important as normally we get all investment/ premium alerts, bank transactions/balances, share transactions, credit card due, mobile bill and other details thru sms alerts. Mobile is the most popular communication tool. Most importantly, the Bank Relationship Manager and his Financial Advisor will regularly contact him for new investments, etc. and from them also you can know about his/her investments.

Not only retain, get the number transferred in your name by doing a small paperwork with the mobile service provider. You never know what is there for you to know in future?

3. Mutual Funds (MF) – You might get some statements which will have folio (account) nos. But, how to know his entire holding across all the Mutual Funds (currently 40+ mutual fund companies)? Please approach the following 5 Mutual Fund registrars (these 4 entities services all the MFs in India) with the deceased PAN No., name and address-

These registrars can check all the investments online based on PAN No. and also on the basis of name/address. If you approach all the five entities you will come to know the entire MF holdings. Now, how to claim the investments? If the deceased has made someone nominee then the nominee can claim by writing a letter attaching his/her PAN No., identity & address proof, bank details along with a cancelled cheque along with attested/notarized copy of deceased’s death certificate. If there is a joint holding, then the process is simple and the joint holder can retain the investment by requesting deletion of deceased name by providing the above docs or else can redeem the entire holding by giving the same set of documents.

4. Check KYC - You can also check online if he had a KYC (now mandatory for investment in Mutual Funds/shares) – Check at all the below links -

5. Insurance Policies – Apart from the bank statement the other way is to check all his papers and files and find out the renewal deposit receipts or policy bonds. There is a possibility that he had taken policies by paying the premium in cash and therefore not reflecting in the bank account. The nominee can approach the Insurer directly and fill up the “Claim form” along with his ID, address proof, bank details and a copy of the death certificate. The complete details of all Insurers are available at www.irda.gov.in. In case of any problem in claim settlement the nominee should contact the regional Insurance Ombudsman Office http://www.irdaindia.org/ombudsmenlist_nov07.htm

6. Share Trading Account – Share Trading cannot be done with having a Demat account and PAN Number. If the deceased had some investments in shares then he will have a Demat account with the Broker/ or his bank else he will have physical shares. Please search through papers and look for a Demat account statement or check the bank accounts whether any cheque has been issued in favour of any broker? In case you have some doubt and/or do not get any clue about the shares or demat account you may contact the following Depository Services with PAN No. of the deceased –

They can search and confirm whether the deceased has a Demat Account or not? And if yes, with which Broker/ bank and also with which share Tradind account it is attached? Nominations and joint holding is possible – therefore, check the nominee name and/or joint name and accordingly approach the broker/bank for doing the needful.

Remember, if the deceased was the first holder the shares can be transferred in the name of joint holder (in case of joint holding) or to the nominee (in case of nomination). If no joint holding or nomination exist then you will have to get it transferred on the basis of succession certificate.

7. Bank Locker – While checking his bank accounts try to check if some amount for Locker Rent has been debited or not? Normally its an annual rent so to figure out you will have to check bank statements for one full financial year.

8. Bank Accounts – This is pretty simple. Approach the bankers and check the nominee name and joint names and claim accordingly. In case of No nominee and no joint holding then the law of the land will apply – Check whether he has left a Will? Or consult a Lawyer to prepare a succession certificate. This will also help you in liquidating/ dividing or sell off his/her real estate investments/shares and other moveable/ immovable assets.

9. Share in paper-form (Non-demat) – Only in three situations that you will get physical shares – either the deceased has not dematted the shares despite having a demat account, he did not have a Demat account and/or maybe the Shares have been delisted or not having an ISIN number (meaning, the company has not opted for dematerialization). In all the cases first check the status of the company by visiting www.nseindia.com and if an ISIN number of the company is found then first transfer the shares in the name of joint holder or if it’s in single holding request the company to transfer the shares in legal heir/s name by producing the succession certificate (as discussed earlier). Please note while buying shares you cannot nominate anyone but go for joint holding. Nomination is allowed in Demat Account, meaning a person can apply for buying shares/ open a demat account in single/ joint name and nominate somebody in the demat account.

You have to register using the PAN & Mobile number of the deceased. Else, if he/she is already registered here you can get the balance on the mobile.

Apart from the above, there would be many other things like, transfer of property, the car etc. which can not be done online, therefore, you will have to look for local help. However, you should ideally try to find out one/ or more financial Advisors who I am sure will be able to help you. May we help at www.advisorkhoj.com ?

Pradip Chakrabarty

Pradip is a first generation entrepreneur who has built a very successful business for distribution of financial products over last 19 yrs. He is also the Founder and CEO of www.advisorkhoj.com. Pradip is well respected in the Financial Services industry and brings deep domain knowledge and leadership skills and is considered as one of the top Investment Advisors in India. He can be contacted at pradip@advisorkhoj.com